Your Directors present herewith the 72nd Annual Report of the Companytogether with the Audited Financial Statements for the year ended 31st March2020.
The performance of the Company for the year is summarized below :
(Rs. in lakhs)
|Particulars ||2019-20 ||2018-19 |
|Gross Income ||6093.88 ||4649.23 |
|Profit/(loss) before Interest and Depreciation ||189.09 ||(162.89) |
|Finance charges ||661.42 ||626.82 |
|Gross Profit/(loss) ||(472.33) ||(789.71) |
|Depreciation and Amortization expenses ||334.62 ||356.44 |
|Net Profit/(loss) before tax after exceptional item ||(594.02) ||(1146.15) |
|Provision for tax ||(128.41) ||35.75 |
|Net Profit/(loss) after tax ||(465.61) ||(1181.90) |
|Other Comprehensive Income/(loss) ||(5.42) ||(8.35) |
|Total Comprehensive Income ||(471.03) ||(1190.25) |
|Balance carried to Balance Sheet ||(6407.75) ||(5936.72) |
OPERATIONS AND PERFORMANCE
For the year under review Your Company achieved a gross income of Rs. 6093.88 L (PY:Rs. 4649.23 L) and incurred loss after tax of Rs. 465.61 L (PY Loss : Rs. 1181.90 L).EBITDA was positive at Rs. 189.09 L (PY: Negative Rs. 162.89 L) with improvement inoperating efficiencies.
The top line growth in revenue of 26% achieved over the previous year despite intensecompetition has been mainly due to higher success rate in winning orders compared toearlier years. Gradually the number of projects on hand and being executed is improvingleading to reduction in % of employee and other administrative costs to revenue. Progresshas been made in resolving some of the past receivable issues and collection whilecurrent projects are getting paid on time. The impact of Covid-19 leading to lock downtowards the end
of March 2020 affected the revenue marginally in March 2020. There is however no impacton the order book or on the realization of current assets due to pandemic.
On the Property development business Your Company has made some progress inliquidating the inventory available in Coimbatore although there are few apartments to besold .
The depreciation for the year was at Rs. 334.62 L (PY: Rs.356.44 L). There was anexceptional income to the tune of Rs. 212.93 L on account of waiver of outstandingpreference dividend from 13th November 2014 to 22nd August 2019 bythe holders of 700000 preference shares.
The finance cost for the year increased to Rs. 661.42 L (PY: Rs. 626.82 L). The PBTafter exceptional items was at negative Rs. 594.02 L (PY: Rs. 1146.15 L).
As the Company has incurred a loss no dividend is recommended for the financial year2019-20. Consequent to the same the Company has not transferred any amount to generalreserve.
The company's paid-up equity capital was Rs. 3323.36 Lakhs as on 31st March2020. The company's paid-up preference share capital as on 31st March 2020stood at Rs. 2835.63 L. ( P Y Rs 700 L ).
During the year the company obtained the approval of the shareholders at the 71stAnnual General Meeting for the issue of 2300000 - 7% Cumulative Non ParticipatingRedeemable Preference Shares of Rs 100 /- each on private placement basis. Out of the saidissue 1200000 - 7% Cumulative Non Participating Redeemable Preference Shares of Rs100/- each aggregating to Rs 120000000/- in tranche 1 and 935630 - 7% Cumulative NonParticipating Redeemable Preference Shares of Rs.100/- each aggregating to Rs93563000/- in tranche 2 were allotted on 3rd September 2019 and 24thOctober 2019 respectively on private placement basis.
DETAILS OF DEPOSITS
The Company has not accepted any Deposits covered under Section 73 of the Companies Act2013 read with the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS / GUARANTEES GIVEN / INVESTMENTS MADE
The Company has not extended any loans guarantees nor made any investments coveredunder the provisions of Section 186 of the Companies Act 2013.
With an insight to integrate risk management with the overall strategic and operationalpractices the Board of Directors have established a review and monitoring process withthe management to
ensure that the risks pertaining to the business are identified steps are taken tomanage and mitigate the same and periodical updates are discussed. The Board of directorsensure a discussion with the management team to enable proper risk oversight by the Board.The Board had constituted a Risk Management Committee details of the same and its termsof reference are set out in the Corporate Governance Report forming part of the Board'sReport.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In addition to the Internal Controls on Operations the Board has laid down standardsprocesses and structures to implement internal financial controls to ensure that thefinancial affairs of the Company are carried out with due diligence. The effectiveness ofthe internal financial controls is ensured by management reviews continuous monitoringand self-assessment and review of all financial transactions and operating systems by theinternal auditors. The Company has also in place adequate Internal Financial Controlswith reference to Financial Statements. During the year such controls were tested and noreportable material weaknesses or inefficacy or inadequacy in the design or operation wereobserved.
RE-APPOINTMENT OF RETIRING DIRECTOR
Based on the recommendation of Nomination & Remuneration Committee and approval ofthe Board Ms. G. Jalaja Director (DIN: 00149278) who retires by rotation pursuant toSection 152(6) of the Companies Act 2013 and Article 17.26 of the Articles of Associationat the forth coming Annual General Meeting and being eligible offers herself for re-appointment.
RE-APPOINTMENT OF INDEPENDENT DIRECTOR
Mr. P. Nagarajan was appointed as Independent Director of the Company at the AnnualGeneral Meeting held on 24th July 2015 for a period of 5 consecutive years upto the conclusion of the 72nd Annual General Meeting of the Company. Based
on the recommendation of the Nomination and Remuneration Committee the Companyproposes to re-appoint Mr. P. Nagarajan for a period of 5 years as an Independent Directorof the Company from 23rd July 2020 . The Company has received necessarydeclaration from him under Section 149(7) of the Companies Act 2013 that he meets thecriteria of independence laid down in Section 149(6) of the Companies Act 2013 and thathe has registered himself in the databank maintained by the Indian Institute of CorporateAffairs and has also passed the online proficiency self-assessment test.
In the opinion of the Board Mr. P. Nagarajan the Director proposed to be re-appointedas an Independent Director fulfils the conditions specified in the Companies Act 2013and the Rules made thereunder. In terms of Secretarial Standard on General Meetings(SS-2) the necessary resolutions with explanatory statement for the reappointment of saidIndependent Director of the Company is included in the Notice sent along with the annualreport.
CHANGE IN KEY MANAGERIAL PERSONNEL
Mr. Velappan who was appointed by the Board as Manager of the company and KeyManagerial Personnel at the 71st Annual General Meeting of the Company held on24th July 2019 has retired at the closure of business hours i.e. 31stMarch 2020. He was re-appointed as the Manager of the company in the meeting of the Boardheld on 08th June 2020 with effect from 08th June 2020 to 31stMarch 2021 and the necessary resolutions along with the explanatory statement for there-appointment has been included in the notice sent along with the annual report.
Mr. M. Narayanan who was appointed as the Chief Financial Officer on April 26 2018demised on March 28 2020. The Board placed on record its deepest condolences and tooknote of his valuable contributions during his association with the company. Mr. K.Thiyagarajan was appointed as the Chief Financial Officer in the meeting of the Board heldon 08th June 2020.
EVALUATION OF BOARD'S PERFORMANCE
As per the provisions of Section 134(3)(p) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas evaluation of the working of its Audit Committee Nomination and RemunerationCommittee Risk Management Committee and Stakeholders Relationship Committee. The mannerin which the evaluation has been carried out is explained in the Corporate GovernanceReport.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
On their appointment Independent Directors are familiarized about the Company'sbusiness and operations. Interactions with senior executives are facilitated to gatherinsight specific to the Company's operations. Detailed presentations are made available toapprise about Company's history current business plan and strategies. As part of thefamiliarization programme a handbook is provided to all Directors including IndependentDirectors at the time of their appointment. The handbook provides a snapshot to theDirectors of their duties and responsibilities rights process of appointment andevaluation compensation Board and Committee procedures and expectation of variousstakeholders.
The details of familiarization programmes as above are also disclosed on the website ofthe Company at the link: http://www.coromandelengg.com/Inv_ policies.html.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 (Act) stating that the IndependentDirectors of the Company met with the criteria of Independence laid down in Section 149(6) of the Act under Rule 6 of Companies (Appointment and Qualification of Directors)Rules 2014 and stating that they have
registered themselves in the data bank maintained by the Indian Institute of CorporateAffairs and under Regulation 25(8) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Pursuant to Section 178(3) of the Companies Act 2013 the Board on the recommendationsof the Nomination and Remuneration Committee framed a policy for selection and appointmentof Directors Senior Management and other employees and their remuneration. The details ofthe Remuneration Policy are stated in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2020 the Board had met Five (5)times 15th May 2019 18th June 2019 24th July 2019 24thOctober 2019 and 23rd January 2020. The Audit committee met Four (4) times on15th May 2019 24th July 2019 24th October 2019 and 23rdJanuary 2020. The details of the said meetings are given in the Corporate GovernanceReport.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors' make the following Statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) that in the preparation of the annual financial statements for the year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanations relating to material departures if any
(b) that the Directors had selected such accounting policies as mentioned in Note No. 3of the Financial Statements and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the company as at 31st March 2020 and of the profit / loss of the companyfor the year ended on that date;
(c) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) that the annual accounts for the year ended 31st March 2020 have beenprepared on a 'going concern' basis;
(e) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively;
RELATED PARTY TRANSACTIONS
During the financial year under review all transactions entered into by the Companywith related parties were in ordinary course of business and on an arm's length basis andwere not considered material as per the provisions of Section 188 of the Act read with theCompanies (Meetings of Board and its Powers) Rules 2014 and Regulation 23 of the SEBIListing Regulations. Hence disclosure in form AOC-2 under Section 134(3)(h) of the Actread with the Rule 8 of the Companies (Accounts of Companies) Rules 2014 is notapplicable.
Prior omnibus approval is obtained for Related Party Transactions ("RPTs")which are of a repetitive nature and entered in the ordinary course of business and atarm's length. A statement on RPTs specifying the details of the transactions pursuant toeach omnibus approval granted is placed on a quarterly basis for review by the AuditCommittee. Further transactions proposed in subsequent quarter are also presented. Thedetails of contracts and arrangements with related parties of the
Company for the financial year under review are given in notes to the FinancialStatements which forms part of this Annual Report. The Policy on Related PartyTransactions as approved by the Board is available on the Company's website athttp://www.coromandelengg.com/Inv_Policies. html
EXPLANATION AND COMMENTS
The reports of statutory auditors and that of the secretarial auditors areself-explanatory and have no adverse comments.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THE REPORT
There are no material changes or commitments after the closure of the financial year.
COMPOSITION OF AUDIT COMMITTEE
Audit Committee constituted by the Board pursuant to Section177 of the Companies Act2013 consists of the following members:
|Mr. P. Nagarajan ||-Chairman |
|Mr. M.A.M. Arunachalam ||-Member |
|Mr. N.V. Ravi ||-Member |
|Mr. R. Surendran ||-Member |
The Board has accepted the recommendations of the Audit Committee and there were noincidences of deviation from such recommendations during the financial year under review.
The Company has devised a vigil mechanism in pursuance of the provisions of Section177(10) of the Companies Act 2013 for Directors and employees to report genuine concerns orgrievances to the Audit Committee in this regard and details whereof are available on theCompany's website.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178 of the Companies Act 2013 the Board has constituted aNomination and Remuneration Committee consisting of the following members:
|Mr. N.V. Ravi ||-Chairman |
|Mr. M.M. Venkatachalam ||-Member |
|Mr. P. Nagarajan ||-Member |
The said committee has been empowered and authorized to exercise powers as entrustedunder the provisions of Section178 of the Companies Act 2013. The Company had laid outand following the policy on director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and othermatters provided under sub section 3 of Section 178 of the Companies Act 2013.
Policy on Criteria for Board Nomination and Remuneration policy is available in thewebsite of the Company http://www.coromandelengg.com/ Inv_Policies.html.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
In view of the losses incurred by the Company in two of the three previous financialyears and average of three years' net profit being negative the requirement on spendingor conducting meetings under the Corporate Social Responsibility Policy as per Section 135of the Companies Act 2013 is not applicable to the Company. The Committee was thereforedispensed with at the board meeting held on 23rd January 2020.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The company has not received any significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and company'soperations in future.
The members of the company at the 69th Annual General Meeting held on 26thJuly 2017 appointed M/s. CNGSN & Associates LLP Chartered Accountants (FR No.004915S/S200036) Chennai as Statutory Auditors of the Company to hold office
until the conclusion of the 74th Annual General Meeting. The Statutoryauditors have confirmed their eligibility under section 141 of the Companies Act 2013 andhave expressed their willingness to continue as the auditors of the company.
As required under Regulation 33(1) (d) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the auditors have also confirmed that they hold a validcertificate issued by the Peer review board of the institute of Chartered Accountants ofIndia.
The Report given by M/s. CNGSN & Associates LLP Chartered Accountants on theFinancial Statements of the Company for the year ended 31st March 2020 isprovided in the Finance Section of the Annual Report. There are no qualificationsreservations adverse remarks or disclaimers given by the Auditors in their report.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 Mr. N.V. Thanigaimani Cost Accountant(Membership No.15557) has been appointed as the Cost Auditor of the Company for thefinancial year 2020-21. The remuneration payable to the cost auditor is required to beplaced before the Members in a general meeting for their ratification. Accordingly aresolution seeking ratification for the remuneration payable to Mr. N.V. Thanigaimani isincluded the Notice convening the Annual General Meeting.
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company had appointed Ms.Srinidhi Sridharan & Associates Company Secretaries Chennai to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is annexed here with.During the year under review there has been no qualification reservation or adverseremark or disclaimer in their report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report highlighting the business details isattached and forms part of this report.
CORPORATE GOVERNANCE REPORT
The company is committed to good corporate governance practices. All materialinformation were circulated to the directors before their meeting or placed at theirmeeting including minimum information required to be made available to the Board asprescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of theListing Regulations.
In terms of Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a report on CorporateGovernance along with a Certificate from a Practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under Part E ofSchedule V of Sub-Regulation 34(3) of the Listing Regulations is attached to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a prevention of Sexual Harassment and Grievance HandlingPolicy in line with the requirements of The Sexual Harassment of Women at the work place(Prevention Prohibition & Redressal) Act2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed ofduring the year 2019-20:
No. of complaints received - Nil
No. of complaints disposed of - Not Applicable
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
The Company does not have any commercial activity that calls for conservation of energyand/ or technology absorption attracting disclosure in pursuance of Rule 8(3) of theCompanies (Accounts) Rules 2014. During the year the Company did not have any foreignexchange earnings and outgo.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in the prescribed formMGT-9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 is annexed to and forms part of this Reportand is also available at the website of Company : http://www.coromandelengg.com/Inv_AnnualReports.html
The Company is in compliance with the Secretarial Standard on Meetings of the Board ofDirectors (SS-1) and Secretarial Standard on General Meetings (SS-2).
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median of employees' remuneration asper Section 197(12) of the Companies Act 2013 and information relating to employees to bedisclosed under Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is annexed to and forms part of this report.
LISTING OF SECURITIES IN STOCK EXCHANGES
The Company's Equity Shares are presently listed on BSE Ltd.
The company has not issued equity shares with differential voting rights or sweatequity shares.
There have been no material changes and commitments affecting the financial position ofthe company between the end of the financial year and the date of this report.
CHANGE IN NATURE OF BUSINESS
There has been no change of business during the financial year under review.
Your Company has been certified under ISO 9001:2008 for quality management system andBS OHSAS18001:2007 for safety management system in design and establishment of propertydevelopment construction of residential commercial and industrial projects supportingservices like electrical mechanical and plumbing works.
Your Directors place on record their appreciation for the continued co-operationsupport and assistance extended to the Company by its Bankers Shareholders theGovernment of India and the Government of Tamil Nadu.
| ||On behalf of the Board |
|Place: Chennai ||M.M.VENKATACHALAM |
|Date: 8th June 2020 ||DIN:00152619 |
| ||Chairman |